According to the Department of Education and The National Student Loan Data System, approximately 44 million American borrowers owe over $1.48 trillion in student loan debt. That is about $620 billion more than the total U.S. credit card debt. This is a looming trainwreck for our nation’s young adults.
Interest rates on these loans range from 4.8% to 13%, and the payments eat away at a graduate’s monthly budget, while only covering interest. Simply put, this debt looks more like a 30 year mortgage. This dent in their monthly budget prevents them from fully engaging in the economy through the purchase of large ticket items like homes, cars, and even engagement rings.
Congress must take legislative action to ensure that the American Dream is not stolen from the next generation. They should move student loan debt into a low interest (2.59%) bond without liability for the taxpayer. Consequently, banks will have $1.4 trillion more to lend to small businesses. Our next generation will receive the American Dream and small business will receive loans to grow the economy and job market. Small businesses make big jobs.